How to Start a Small Web Design Firm

For web designers, transitioning from working full-time for someone else to freelancing has some perks, like being your own boss and having a more flexible work schedule. But you’ll also be in charge of every aspect of running your business and making hard decisions which can impact the success and growth of your company.

Once you’ve decided that you’re ready to start a small web design firm, you’ll need to develop a host of skills to help you run a successful business, including time management, sales and promotional strategies, and client acquisition.

1. Create a one-page business plan

The first step to running your own business is creating a solid plan. This is where you get your idea out of your head and onto paper to put it to the test, but it doesn’t have to be a 50-page long document that you’ll work through once and file away, never to be seen again.

Instead, you can create an alternative to a traditional business plan—a one-page plan which is easier to adapt throughout the life of your business. The goal here is to write a plan that’s going to lend itself to regular reviews and frequent updates, based on goals and performance that might change quickly over time—it should be a tool, not a static document.  

Your one-page plan should include an overview of your strategy and tactics (problem-solving and possible solutions), your business model (including your target market and competition), and a schedule of what you’re doing and when. You should also include some core financials such as a sales forecast, expense budget, and cash flow forecast. Don’t forget to outline your milestones, so you’ll have a clear sense early on of whether your strategies are working.

Most importantly, you should set up a timeline to keep revisiting your plan and adjust it on a regular basis to ensure you’re on track to meeting your goals.

2. Calculate startup costs

While you may envision running an agency full of designers in the future, you’ll probably begin your journey as an independent (solo) freelancer.

The good news is that startup costs are relatively low, but you will need a few things, so make sure you spend some time thinking through your startup costs.

• The basics. In addition to basic equipment such as a computer, phone, and desk, you’ll need to consider the cost of registering a domain name and building your own website. You’ll also need business cards, stationery supplies, and software that’s specific to your design work. When you’re just starting out, you can make use of 30-day free software trials until you find the right fit. But ensure your business cards and other promotional materials showcase your best design work to make a good first impression.
• Insurance, taxes, and software. Be sure to consider the costs of health insurance, personal liability insurance, and taxes, and software tools that you’ll need. When it comes to accounting software, many services are aimed at small businesses and handling your own bookkeeping can work out cheaper. QuickBooks, Xero, and FreshBooks are all popular choices. However, finding a good accountant early on can save you a lot of heartache in the future, and will help ensure you know exactly where you stand in terms of your tax position and other liabilities.

3. Build your brand

How you brand yourself is an important decision which can impact the way your clients see you. Many freelance web designers choose to use their name as their brand, which on the positive side lends a personal attachment to your business.

Your clients will feel they’re working with an individual rather than a fully fledged agency, which usually translates to more flexibility, a personal approach, and cheaper rates.

However, if your high-level goals include growing your business, maybe turning it into a studio and hiring a few more people, then you may want to start out with a more formal name.  

When you’re creating your business plan, take the time to think about how you’d like potential customers to perceive you and how this fits in with your view as a freelancer and your future goals. Would you rather be seen as a young startup company, or work on creating your own personal brand?

4. Establish your freelance rates

If you don’t have a framework for establishing your rates from the beginning, it’s very easy to end up working for very little money. It’s much harder to raise your rates later on and can affect the timeframe for getting your new venture off the ground.

Calculating your rates:

• It’s difficult to know where to begin, so start by calculating your monthly costs. Include everything such as your rent, utility bills, travel costs, insurance, and tax liability.
• Multiply this sum by twelve and add your ideal annual salary.
• Divide this figure by 48 to figure out what your costs are per week (allowing for four weeks holiday).
• Finally, divide your weekly cost by the number of hours you plan on working in a week —many freelancers start with 20 hours—to establish your hourly rate.

Make sure you get paid

Managing cash-flow as a freelancer can be very stressful, so once you’ve established your rates, you’ll need to do everything you can to ensure you’re paid on time. Make sure you always have a contract which stipulates the scope of the project and terms of payment and request a deposit before you begin work.

For longer projects, it’s also standard to ask for milestone payments so that you’re guaranteed compensation over time.  

Some freelancers prefer to be paid up front, but in order to do this, you’ll need to be able to estimate the typical number of hours a project will take and then add a percentage for overage.

5. Showcase your work

Your portfolio website is undoubtedly one of your most important assets when it comes to promoting your services. At a minimum, your website should state your services and offer a clear way to contact you, but to really show off your expertise, you should use it showcase your previous work.

This can be hard when you’re just starting out and your portfolio can seem light, but there are ways around this. Consider reaching out to local charities, schools, church groups, and so on, and offer your services for free or at a low cost.

This is a good way of expanding your portfolio, practicing your skills, and helping out in your local community. You don’t need to include all the work you’ve ever done—three or four high-quality pieces should be enough to show people what you can do.

6. Promote your services

However good your web design skills are, they’ll mean nothing if you don’t know how to promote and sell your services.

You should develop a sales process that covers the following:

• Finding new prospects
• Cultivating relationships
• Informing potential clients about your services
• Offering your services to the right people
• Fulfilling expectations
• Developing relationships with clients

To identify your ideal client (or your target market), think about who they are, what they do, and where they spend their time (both online and in person). Choose some of the same places to hang out and try to engage them in conversation.

This is the perfect time to impress people with your elevator pitch, which is what you use to show potential clients how you can help their business and the reasons they should hire you.

Online freelancing platforms such as Upwork and Freelancer are also good places to find prospective clients. However, competition among freelancers from all over the world is fierce, and many employers opt for the lowest possible rates. You’ll need to be selective about the jobs you bid on and try to identify serious clients who are happy to pay for quality work.

Show your target market how you tackle their specific concerns and provide concrete examples of how you’ve solved those problems successfully in the past. This approach makes it much easier to find new clients.

7. Start networking

Connect online. Communities where other professionals in the industry hang out are great places to find support from people who are in a similar situation. Follow other designers and developers on Twitter, and reach out to people on LinkedIn, Facebook, or other social media channels.

Be part of your local community. Joining groups for freelancing professionals and immersing yourself in communities provides great opportunities for networking, asking and answering questions, establishing your expertise, and helping people who may be looking for your services in the future.

Keep your ear to the ground. You could start by following blogs which have a high number of comments and regular contributors, as well as signing up to RSS updates on web development boards. It’s all about interacting with other web designers, connecting with potential clients, and gaining referrals.

8. Master time management

As a freelancer, being organized and productive means you can get the most out of your day without being glued to your desk for hours on end, so you can start to scale your business. By implementing a little structure, you can schedule your tasks around the times you’re most likely to get things done.

Develop a routine. It can help to group similar tasks together and consistently carry them out at a certain time of day. For instance, answering emails in the morning as you’re still waking up, taking care of phone calls after your second cup of coffee, and coding/designing whenever you have the most energy.

Take advantage of tools. There is lots of software available to help simplify and automate many of your daily tasks, so make use of the tools available for time tracking, project management, managing finances, etc.

The bottom line

Successful freelancers are excellent multitaskers. To deal with the uncertainties of running your own business and the stress of an irregular income—at least when you’re starting out—you need a plan. The more structure you have from the outset, the easier it will be to develop a successful business and grow your company in the right direction.